4 ASX shares in the retail sector with juicy dividend yields

It's dividend hunting season…

Mitchell Lawler

Mitchell stumbled upon the concept of investing when in high school, devotedly urging his parents to put some money into a handful of technology companies with increasingly popular products among his demographic – many of which have gone on to great success. It wouldn’t be until 2017, some five years later, that Mitchell became an investor of his own money. Having studied and worked as a mechanical engineer in the building services industry, Mitchell takes a methodical and analytical approach to evaluating businesses. Rather than relying purely on numbers, Mitchell drills beyond a company’s metaphorical mantle to unearth obscure patterns or competitive advantages that would go otherwise unnoticed. His expertise resides within areas such as software, consumer goods, and building services equipment. However, his quest to find quality companies that set the industry standard and flex some degree of an impenetrable position has no limits – small cap to mega cap, cosmetics to healthcare – if it’s an exceptional business it’s on his radar.

Published June 14, 2021 1:52 pm AEST

Dividend shares can offer a great way to apply the wonderous power of compounding to your portfolio. When a company pays out its dividend to shareholders, sometimes the option to reinvest is available – allowing investors to earn dividends on their dividends over the long term.

The great thing is dividends can be industry agnostic. If you're not happy investing in mining companies and banks, there are opportunities in other ASX industries too.

For instance, let's take a look at 4 ASX dividend paying shares in the retailing sector.

A happy shopper lifts her bags high, indicating a rising share price in ASX retail companies — Image source: Getty Images

2 smaller dividend-paying ASX shares in retail:

Dusk Group Ltd (ASX: DSK)

Dusk is the newest and the smallest ASX-listed dividend paying retailer on this list. Making its debut on the market back on 6 November 2020, the home fragrance speciality retailer now holds a market capitalisation of $226 million.

The company has enjoyed strong growth momentum and has provided guidance for FY21 sales to increase between roughly 45% to 50% compared to prior full year result. For dividend investors, the fully franked 30 cents per share dividend for the year may be attractive. Based on today's share price, that's a yield of 8.26%.

Nick Scali Ltd (ASX: NCK)

Next on the list is an Australian furniture retailer that has stood the test of time since 1962. Nick Scali has navigated the last nearly 60 years to become a well-known retailer worth $851 million

An interesting tidbit some may not know is the Aussie company ranks in the top quartile of retailer margins globally. As at the end of December 2020, Nick Scali boasted a profit margin of 20.7%. Those kinds of hefty profit margins are accommodating big dividend payouts.

Based on the past 12 months of dividends, Nick Scali shares are currently offering a yield of 5.98%. However, the final dividend for FY21 has not yet been announced.

2 larger dividend-paying ASX shares in retail:

Accent Group Ltd (ASX: AX1)

Accent has been lacing up the boots and putting in the work for 33 years. The footwear retailer has grown out of its own shoes over the years. Gradually making its way to a $1.52 billion behemoth of the footwear world.

The company's latest Glue Store acquisition further expands its footprint by 21 physical stores. Taking that into account, Accent's store count is now pushing 600 across Australia and New Zealand.

Analysts are estimating 12 cents per share for the FY21, which would give the company's shares a dividend yield of 4.27%.

Harvey Norman Holdings Ltd (ASX: HVN)

Last on the list, is the biggest ASX-listed retailer aside from Wesfarmers Ltd (ASX: WES). Harvey Norman sells just about everything except the kitchen sink – furniture, computers, electrical appliances, and so on.

Harvey Norman's reported profits for the half-year ending 31 December 2020 skyrocketed 116.3% to $462 million. The stellar growth was underpinned by a jump in franchising profitability.

In early 2020, the retailer took the prudent response to COVID-19 by cutting dividends. With business now booming again, it looks like investors will be getting that back and then some. Based on the past year of payments, Harvey Norman's dividend yield is a spectacular 7.7% based on its current share price.

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